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Changes for Prescription Drug Encounter Data in 2024

Date
Drug-Encounter-Data

The Centers for Medicare & Medicaid Services (CMS) has been processing Part D drug claim data via the Drug Data Processing System (DDPS) since inception of Part D in 2006. PDE provide the foundation for revenue reconciliation with drug plan sponsors (Sponsors) at the end of a contract year[1]. The deadline for submission of final PDE to be included in the Annual Part D Payment Reconciliation is the last business day in June. Due to multiple changes to the Part D program pursuant to the Inflation Reduction Act (IRA) of 2022, some DDPS edit changes will take effect on January 1, 2024. Sponsors are advised to submit PDE within 30 days following the Date of Service or Date Claim Received, whichever is greater[2] and to make any adjustments or deletions via DDPS within 90 days upon receipt of their response files.[3]

By now, all Sponsors would have received at least 2 months of PDE responses. Most sponsors dedicate resources to review the PDE rejections and to resolve them timely. As a reminder, we are listing changes to DPPS edits in 2024 below:

  1. Edit 842 The Other TrOOP Amount Indicator is invalid – For dates of service (DOS) between 1/1/2023 and 12/31/2023, valid values are ‘B’, ‘S’ or blank for covered insulin products and vaccines recommended by the Advisory Committee on Immunization Practices (ACIP). For all other DOS after 12/31/2023, the Other TrOOP Amount Indicator must be blank to indicate the amount reported in Other TrOOP Amount contains only non-IRASA[4] Other TrOOP amount, if any.
  2. Edit 733 The Submitting Contract/PBP is not a participant in the Part D Senior Savings Model (PDSS) on the DOS. The PDSS Model offered by Sponsors to provide beneficiaries with a one-month supply insulin at no more than $35 ended on December 31, 2023. The field for the Part D Model indicator must be blank as of January 1, 2024.
  3. Edit 675 CPP[5] reported in the catastrophic phase must = 100% of the catastrophic cost for DOS beginning January 1, 2024. Prior to 2024, when a PDE straddles the out-of-pocket (OOP) threshold where LICS > zero, CPP must be 95% of GDCA[6].
  4. Edits 716-721 – These are edit codes for low-income subsidy (LIS) payments. Effective January 1, 2024, category 4 beneficiaries will have the same Part D benefit parameters as beneficiaries in LIS category 1[7]. When processing eligibility data, Sponsors should ensure the Pharmacy Benefit Manager (PBM) is aware of this change. Categories 2 and 3 benefits remain unchanged.
  5. Edits 902 to 908- this series of rejection edits is related to IRA. For covered insulins and ACIP-recommended vaccines, NPP[8] must be zero and Patient Paid Amount is also zero.

In case Sponsors want to identify who should resolve which rejection codes, you may find the following helpful:

  • For all eligibility-related reject codes including LIS status – Sponsors have to resolve by validating eligibility on DOS and the various categories of LIS for the plan’s enrollees;
  • For payment rejection codes – PBM has to resolve by correctly calculating the accumulated TrOOP, benefit parameters of the plan and assigning financial responsibilities to various stakeholders including drug manufacturers;[9]
  • For drug-related rejection codes such as coverage status or National Drug Code (NDC) – PBM has to validate; and
  • For other rejection codes classified s Miscellaneous by CMS – Sponsors and the PBM should collaborate to resolve.

The PBM appears to be responsible for resolving majority of the rejected PDE; however, Sponsors are ultimately responsible for unresolved rejects and payment discrepancies. CMS monitors unresolved PDE rejects and its contractor, Acumen, notifies Sponsors via the monthly Immediately Actionable Error Reports (IAP) and aging of outstanding rejects. Sponsors are advised to take action within a 90-day timeframe not later than the last business day in June in the following year; otherwise rejected PDEs would not be included in the Annual Part D Revenue Reconciliation.


[1] Revenue reconciliation for Part D usually takes place in September for the prior contract year.

[2] Annual PDE submission Timeline from CSSC Operations.

[3] Continuation of the Prescription Drug Event (PDE) Reports and PDE Analysis Reporting Initiatives for the 2022 Benefit Year April 29, 2022

[4] IRASA = Inflation Reduction Act Subsidy Amount

[5] CPP = Covered Plan D Paid Amount

[6] GDCA = gross drug costs above OOP threshold

[7] Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates, and Part C  and Part D Payment Policies March 31, 2023

[8] NPP=Non-covered Plan Paid amount

[9] The new Manufacturer Discount Program begins on January 1, 2025. For 2024, the Coverage Gap Discount program remains.

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